Indigenous Banking System

A Business Study Project

INTRODUCTION
Indigenous banking system is
the system of banking that
involves private firms or
individuals who act as banks by
providing financial services
such as loans and accepting
deposits.
• Indigenous banking system is made up
of indigenous bankers who do not fall
under the purview of the government.
The system of indigenous banking dates
back to the medieval period. This system
continued till the middle part of the
nineteenth century.

• Indigenous bankers formed the bulk of

the Indian financial system in the ancient
times. These bankers provided credit
facilities to the individuals and
businesses as well as to the governments
at times.
 As economic life progressed,
metals began to supplement
other commodities as money
The spiel of because of its durability and
Indigenous divisibility. As money served as a
medium of exchange, the
Banking introduction of metallic money
and its use accelerated
system economic activities.
A hundi for Rs 2500 of 1951, stamped in the Bombay
Province with a pre-printed revenue stamp.
It involved a contract which —
i. Warrant the payment of money, the
promise or order which is
unconditional
ii. Capable of change through transfer
by valid negotiation. Indigenous
banking system played a prominent
role in lending money and financing
domestic and foreign trade with
currency and letter of credit.

Bank Memo to Hundi

With the development of
banking, people began to
deposit precious metals
with lending individuals
functioning as bankers or
Seths, and money became
an instrument for supplying
the manufacturers with a
means of producing more
goods.
Opium Hundi
Name of Hundi Broader Classification Functions of Hundi
Dhani-jog Dharshant Payable to any person-no liability over who
received payment
Sah-jog Dharshant Payable to a specific person, someone
'respectable'. Liability over who received payment.

Firman-jog Dharshant Hundi made payable to order

Dhant-jog Muddati Payable to any person-no liability over who
received payment, but payment over a fixed term.

Firman-jog Muddati Hundi made payable to order following a fixed

term.
Jokhmi Muddati Drawn against dispatched goods. If goods lost in
transit, the drawer or holder bears the costs and
the drawee carries no liability.
British India Hundi Princely state Hundi Other type of Hundi
 • Ranveer Sharma
• Ronak Marlecha
• Vir Dadha
Credits •
•
Shashwat
Aman Chordia
• Daksh V Mandoth
• Sarvesh
• Samkit